BANKING & FINANCE - Aug. 13, 1991

T-Bill Yields Fall to 4-Year Low: The Treasury sold $10.5 billion of new three-month bills at an average discount rate of 5.30%, down from 5.51% last week. Another $10.4 billion of new six-month bills was sold at an average discount rate of 5.39%, down from 5.59% last week. The three-month bill rate was the lowest since they sold for 5.12% on Oct. 26, 1987. The six-month bill rate was the lowest since they averaged 5.27% on Jan. 20, 1987. The new discount rates understate the actual return to investors--5.46% for three-month bills, with a $10,000 bill selling for $9,866, and 5.63% for a six-month bill selling for $9,727.50. The discount rate reflects the price discount received when government securities are purchased at less than face value.

T-Bill Auction 6-month: 5.395% 3-month: 5.30%